Post by DDNYjets on Jun 2, 2017 9:33:17 GMT -5
Satan gave the Earth the death sentence yesterday. But Earth will probably be on death row for a few hundred or thousands years. Long before that we face a different apocalypse.
In 2050 not only will we be .01 degrees warmer. We will also be on the brink global insolvency.
qz.com/994596/the-world-faces-a-400-trillion-disaster/
The world is sitting on a $400 trillion financial time bomb
In 2050 not only will we be .01 degrees warmer. We will also be on the brink global insolvency.
qz.com/994596/the-world-faces-a-400-trillion-disaster/
The world is sitting on a $400 trillion financial time bomb
Financial disaster is looming, and not because of the stock market or subprime loans. The coming crisis is more insidious, structural, and almost certain to blow up eventually.
The World Economic Forum (WEF) predicts that by 2050 the world will face a $400 trillion shortfall (pdf) in retirement savings. (Yes, that’s trillion, with a “T”.) The WEF defines a shortfall as anything less than what’s required to provide 70% of a person’s pre-retirement income via public pensions and private savings.
The US will find itself in the biggest hole, falling $137 trillion short of what’s necessary to fund adequate retirements in 2050. It is followed by China’s $119 trillion shortfall.
Asset returns have been lower than they were in the past and people are living longer, so some of this shortfall is to be expected. The WEF assumes many people born recently will live beyond 100, which may be a bit much (the Social Security Administration expects most Americans born today to live into their mid-80s). But much of the massive shortfall is baked into retirement systems; setups in which nobody, neither individuals nor the government, saves enough. About three-quarters of the projected comes from underfunded promises from governments, with the rest mostly accounted for by under-saving on the part of individuals.
Michael Drexler, head of financial and infrastructure systems at the WEF, who edited of the report, likens the problem to climate change. “Like climate change, you don’t see the consequences today, but if you do nothing the problem builds up and then there is nothing you can do,” he says. “Today you can still change things, but if you do nothing you’ll wind up with a problem that is three to four times the global economy.”
Financing a long and comfortable retirement requires contributions from multiple sources, as well as shared risk. “If in 2050 people reach 85 and run out of money they’ll need to rely on Social Security,” Drexler explains. “But if there’s a shortfall the government will be overwhelmed by demand or pensioners living in poverty. We must start educating people now, so we have a good [defined-contribution pension] plans so people have something.”
The World Economic Forum (WEF) predicts that by 2050 the world will face a $400 trillion shortfall (pdf) in retirement savings. (Yes, that’s trillion, with a “T”.) The WEF defines a shortfall as anything less than what’s required to provide 70% of a person’s pre-retirement income via public pensions and private savings.
The US will find itself in the biggest hole, falling $137 trillion short of what’s necessary to fund adequate retirements in 2050. It is followed by China’s $119 trillion shortfall.
Asset returns have been lower than they were in the past and people are living longer, so some of this shortfall is to be expected. The WEF assumes many people born recently will live beyond 100, which may be a bit much (the Social Security Administration expects most Americans born today to live into their mid-80s). But much of the massive shortfall is baked into retirement systems; setups in which nobody, neither individuals nor the government, saves enough. About three-quarters of the projected comes from underfunded promises from governments, with the rest mostly accounted for by under-saving on the part of individuals.
Michael Drexler, head of financial and infrastructure systems at the WEF, who edited of the report, likens the problem to climate change. “Like climate change, you don’t see the consequences today, but if you do nothing the problem builds up and then there is nothing you can do,” he says. “Today you can still change things, but if you do nothing you’ll wind up with a problem that is three to four times the global economy.”
Financing a long and comfortable retirement requires contributions from multiple sources, as well as shared risk. “If in 2050 people reach 85 and run out of money they’ll need to rely on Social Security,” Drexler explains. “But if there’s a shortfall the government will be overwhelmed by demand or pensioners living in poverty. We must start educating people now, so we have a good [defined-contribution pension] plans so people have something.”
